Good government reigns in the treasurer’s office
Today, I am going to ask my readers to allow me to have a point of personal privilege regarding a good government effort that has been completed.
Please understand that I was involved in the beginning of this and there is some personal pride in its completion.
A little history is necessary to understand how the darkest hours in the history of the Arkansas Treasurer’s Office came to bring about this piece of good government.
Martha Shoffner, a Democrat who served as a lackluster legislator until she became term limited, was elected Treasurer in 2006. She was re-elected to a second four-year term before her troubles surfaced.
There are seven statewide offices created by the Arkansas Constitutional office. They are governor, lieutenant governor, attorney general, secretary of state, treasurer, auditor and land commissioner.
The Little Rock news media generally focuses its attention on governor, lieutenant governor, attorney general, and secretary of state. The media generally ignores what happens in the other offices.
On May 18, 2013, the FBI arrested Shoffner. She was indicted by a federal grand jury, convicted and sent to federal prison for taking bribes in exchange for giving state business to those who should never have been allowed to do business with the state.
Saline County’s own Dennis Milligan, then the Saline County Circuit Clerk, ran and was elected as Treasurer. I worked on his campaign and was his chief of staff in that office.
Milligan, the first Republican Treasurer since Reconstruction, advanced some ideas on good government that were unheard of in this state.
Rather than allow the Treasurer to do business with anybody he or she wanted — say people who gave money to a successful candidate’s campaign — one of his ideas was to institute a “blind bidder” system.
In this state, the treasurer handles the money that comes in from various taxes. He must have what is needed to pay the state’s bills every day.
While waiting on that money to be needed to pay state bills, those funds are invested to earn interest. I’ve heard Milligan say countless times that every dollar he earns the state in interest is another dollar that doesn’t have to come out of taxpayers’ pockets.
Milligan recently announced the blind bidder program is running and in the first eight months, it had earned the state an additional $845,000 in interest. Remember I mentioned the Little Rock media doesn’t care what happens in the three less-sexy constitutional offices? The Arkansas Democrat-gazette devoted a whopping three paragraphs to this good government story.
The blind bidder program is officially called the Arkansas Transparent Treasury Auction (ATTA). IT makes sure there is fairness when state banks want to hold certificates of deposit of state funds.
“Previously, we had to call through lists of banks when we had CDS to place and the process could take up to a full days’ worth of work for our investment team. Using the auction platform, we’ve reduced the amount of time it takes to roughly 30 minutes from start to finish,” Milligan said.
When banks want to compete for state business on CD’S, the financial institution has to be certified being on a sound financial footing.
The bidding process is available for viewing on the Internet by the public. Think of it as like Ebay where an item is up for auction and bidders submit bids until the time for bidding runs out.
It this case, the banks bidding for state business are assigned a computer generated number when submitting a bid. The public can see what interest rate a bidder is offering, but the public and treasurer’s office employees don’t know the identity of the bank.
Like on ebay, when bidding ends, the bidder with the highest rate of return sells the state the CDS. Only after the best bid is accepted does the computer reveal the name of the bank making the winning bid.
Banks receive e-mail notification of auction. They can decide if they want to participate in trying to get this state business.
“Before the creation of the ATTA program, the State Treasury was getting a rate of return of between 0.85 to 1.10 percent from banks who purchased CDS,” Milligan said. “Since the auction program began, the highest return we’ve seen with this new program is 2.93 percent, and the lowest was 1.74 percent. That is a significantly higher return than what we were previously getting.”
While CDS are not considered one of the better ways to invest money, state law requires a certain percentage of state funds be invested in CDS.
Good government reigns in the treasurer’s office. I’m taking a moment of personal privilege to express pride in a success I was involved in before my retirement.
JIM HARRIS Conservative Corner